Features Of A Pay Day Loan.
Payday has no set definition; it is however commonly known as a short-term high-cost loan that is meant to be paid on your payday. They are usually available through storefront payday lenders or online. Other names for this loan are cash advance and check advance. Most people who take up the payday loans are people with bad credit or low income, since it doesn't have too many qualifications. Others may not have access to credit cards forcing them to lean on payday loans. Which is as a result of bad credits.
They are normally given in small amounts. The rules on loan size and limits are set by the state. The loan is not paid in instalments; instead, it is a single payment. It takes place on the borrower's next payday or when payment is received from sources like social security or even pension. The date of payment is decided in the payday loan agreement. See more on Quickel here.
When repaying the loan, one writes a post-dated check for the full balance. The lending fee is also paid. In the event that one is not able to repay the loan before or on the due date, the lender can cash the check. The lender does not consider the ability of the borrower to repay as long as the agreement is signed. The loan may be provided in different ways; in cash, electronically being deposited into your account or being loaded on a prepaid debit card.
In some states, the loans are paid back at once. In some other states, the lender is allowed to renew a loan once it is due, so that the lender extends the loan's due date and the customer pays only the amount that is due. In special cases, payday loans could be structured to be paid in installments over a longer period of time. Go here to read more.
In most states, the giving of licences to permit payday loan service provider is regulated. The states sets terms and even gives a guideline on the amount of interest one should pay. In other states, the payday loans are not permitted because they are prohibited by law. Other times it is because business persons decide not do business because of low-interest rates and fees permitted in those states.
Payday service providers have special protection through the federal military lending act that also provides limitations on charging rates of the lenders and other consumer loans. Read more at https://en.wikipedia.org/wiki/Payday_loan.